BBC News – Malawi devalues kwacha by 33%, leading to panic-buying

The kwacha was devalued as part of moves by the new government to restore donor funding.The former government had rejected IMF calls to devalue the currency.Our reporter says that other goods such as rice, maize flour and orange squash were running short in Blantyre’s Chichiri shopping centre – the main retail area in Malawi’s biggest city.He has been told that the same panic-buying is also happening in Malawi’s main towns.The scramble comes despite economists saying they did not expect the devaluation to immediately lead to higher prices, as many businesses were expecting the move and were already using the new exchange rate.The central bank announced that one dollar would now be worth 250 kwacha, up from 168, while the peg to the US currency would be scrapped.”The devaluation of the kwacha and the liberalisation of the foreign exchange market are expected to continue the government’s efforts to reach agreement with the IMF,” said Reserve Bank of Malawi Governor Charles Chuka, adding that this would hopefully lead to more donor funding in the next few months.

via BBC News – Malawi devalues kwacha by 33%, leading to panic-buying.